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Saturday, September 22, 2007

Know Where you Stand to Accomplish 20 Times More

A 2,000 percent solution accomplishes 20 times more with the same time, effort, and resources. How do you develop such great improvements?Follow these steps:1. Understand the importance of measuring performance.2. Decide what to measure.3. Identify the future best practice and measure it.4. Implement beyond the future best practice.5. Identify the ideal best practice.6. Pursue the ideal best practice.7. Select the right people and provide the right motivation.8. Continually repeat the first seven steps.In this essay, I'll focus on the first stepMeasurements Help Erase ComplacencyMost people view the measuring process too narrowly. Here's an example: A corporate planner went to a seminar given by corporate strategist Peter Drucker. The planner asked Drucker to pick the best single measure of corporate performance. Drucker replied, "My dear sir, you obviously know nothing. There is no single measure of corporate performance that is any good. Use them all and try to develop new ones, and each will teach you something you need to know." Drucker's point was that measurements are highly subjective and imperfect. Would-be stallbusters need lots more measures.I'd Rather Not Know That!One CEO tells another Peter Drucker story about measurements. Drucker had presented a personal improvement seminar to the CEO's U.S. Air Force group years earlier. Each man was instructed to measure in great detail how he spent his time for a week. The CEO found this task to be a life-changing experience. The measurements revealed all of his bad habits and put the CEO on guard to avoid those bad habits. Unfortunately, few people follow this CEO's example.Try this exercise for yourself. Measure how much time you spend each week on the telephone, in meetings, doing each routine task, commuting, watching reruns on television, sleeping, and so forth. Then look at how much you accomplished. You will see that measurements can help redirect your efforts into more productive activities.A Perpetual Measuring MachineVisitors to the finance and data processing staffs of a large company were astonished to note that each cubicle's walls were literally covered with performance measurements. The idea was to encourage more focus on expanding productivity. Almost all of the measurements had been developed by the workers for their own use. By looking at each others' measurements, staff members could see how well they were doing in comparison. Colleagues pitched in to help lower performers improve so that everyone could earn larger department-wide, performance-based bonuses.How did they do? Personal productivity gains of 25 percent were not unusual. Furthermore, corporate productivity in these same areas grew by a similar degree. By comparison, most organizations shoot for 2 to 3 percent annual productivity increases. Those low targets telegraph to everyone that they can take it easy.End Results Versus CausesManagement of a luxury hotel chain learned that guests were dissatisfied because it took too long for room service breakfast orders to arrive. The chain jumped in to solve the problem. It added more room service waiters. It even added more kitchen staff. But complaints increased, not decreased. Finally, they looked at how long it took for a waiter to make a delivery and return to the kitchen. Wait! Here was something. The round trips took much too long. Management asked the room service waiters why. The bottleneck was quickly spotted. The waiters were delayed by as much as eight minutes by slow elevator arrivals at the kitchen and the guest room floors.What was going on? Housekeepers were delivering a day's worth of clean sheets and towels at the same time. Because housekeepers had to unload large amounts of linen on each floor, they usually stopped the elevators while the unloading occurred.Understanding the cause, linen deliveries were rescheduled to another time. Room-service complaints were virtually eliminated.With enough of the right measurements to find the causes of your performance, you'll soon be working on the right things, too.Almost Perfect Is Often Not Good EnoughAfter many American manufacturers found that their quality badly lagged non-American competitors in the 1980s, quality improvement became an obsession. Soon, many companies were bragging that they performed at Six Sigma levels (hardly any errors per million activities). Closer examination suggested that some of these companies had missed the boat. They had only achieved being nearly perfect in delivering outmoded offerings. Motorola, for instance, the renowned Six Sigma innovator, saw its profits evaporate in the 1990s when the company fell behind Nokia and others in delivering new digital technologies to the market.Some companies also didn't know how to measure their performance. They broke down every process into hundreds of aspects. Each aspect was measured for performance. Sure enough, almost all aspects were done perfectly more than 99.9 percent of the time. Everyone was smiling.